🟣 Slow and steady as she goes

AI allies proceed, Eth L2 speeds and SOL LSTs

Author

Macauley Peterson
July 01, 2024

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Welcome back to 0xResearch. Here's what we’ve got for you today:

  • ASI migration live

  • Alt Layer, Arbitrum edition

  • STARK strengthens prover throughput

  • Solana LST landscape

Happy July everyone! You’ve made it to the second half.

At the risk of sounding like a broken record to regular readers of 0xResearch: BTC doggedly holding above $60k and moving sideways is good for the bulls.

June was a period of indecision, but the week closing out the month ended in a constructive hammer candle, indicating a potential price reversal to the upside.

BTC must not break down below last week’s low and, to confirm a reversal, should ideally close around here ($63k) or higher as downward momentum on longer timeframes continues to subside.

AI token merger enters new phase

The Artificial Superintelligence Alliance, comprising Fetch.ai, SingularityNET and Ocean Protocol, has moved to Phase 1 of its merger.

The merger aims to create a decentralized AI powerhouse, pooling resources and expertise to advance ethical and transparent AI development.

The trio has unveiled token migration contracts to swap OCEAN and AGIX for FET on Ethereum. Token holders with funds on CEXs will see this conversion apply automatically today.

In Phase 2, new migration contracts will be available to convert any remaining AGIX and OCEAN, as well as EVM-based FET itself, to ASI. 

No need to rush — migration contracts are expected to be available “for years” at a fixed exchange rate.

All native FET tokens will automatically convert to ASI during Fetch.ai's mainnet upgrade.

AltLayer brings MACH to Arbitrum

AltLayer MACH has been serving Optimism’s OP Mainnet since April and has now added support for the largest rollup ecosystem, Arbitrum.

While Ethereum transactions usually take around 12 minutes to finalize, AltLayer MACH brings sub-10 seconds finality via an EigenLayer AVS.

It can be considered an alternative to Ethereum-native pre-confirmations, which typically provide initial confirmations of transactions without full economic backing, often relying on the rollup sequencer's assurances.

In contrast, once proper slashing conditions are enabled on EigenLayer, AltLayer MACH should provide similar guarantees with economic backing through its restaking mechanism.

Arbitrum One hosts hundreds of dapps and has a total value locked (TVL) of approximately $3.65 billion.

StarkWare sets new proving record

StarkWare has achieved a significant milestone with its latest STARK prover, code-named “Stwo.” This new prover, now available in an open-source repository, demonstrates a throughput of over 500,000 Poseidon2 hashes per second on a standard Intel i7 CPU, and more than 600,000 hashes per second on an M3 Pro chipset. These figures represent a considerable improvement over previous technologies, offering over 900x the throughput of the original Stone prover and 50 times that of ethSTARK.

Stwo’s performance is optimized for both CPUs and GPUs, and it benefits from recent cryptographic advancements developed in collaboration between StarkWare and Polygon researchers.

Faster and cheaper provers are essential for scaling blockchain technology, resulting in higher throughput for proving, including via client-side proving on consumer devices like laptops and smartphones.

StarkWare anticipates that reduced proving latency will enhance the finality speed of L2 and L3 solutions, making them sufficient for high-frequency trading and other mainstream financial applications.

The company plans to integrate Stwo into its mainnet for Starknet and StarkEx systems by the first quarter of 2025 under the Shared Proving (SHARP) framework.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley)

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From modularity to restaking, to the intersection of AI and crypto, to the long-awaited consumer-facing apps to the most recent Bitcoin-related innovations.

We’ll be breaking down all of these and more with the help of a few of the thought leaders in crypto at Permissionless.

Solana liquid staking tokens:

Liquid stakers on Solana have a lot of options. The Liquid Staking Ratio increased by 1.76% quarter-over-quarter and the number of liquid staking tokens (LSTs) have roughly doubled.

Solana has avoided having a single LST provider dominate, and even the top three only command 68.7% market share. Sanctum's launch of INF, Sanctum Router, and Sanctum Reserve has lowered barriers to entry, fostering a rapid expansion in the liquid staking sector on Solana.

With over 50 LSTs on Solana, Sanctum's liquidity infrastructure enables newer tokens like vSOL, edgeSOL and jupSOL to grow rapidly.

Jupiter Exchange's jupSOL has emerged as a significant player, surpassing bSOL in market cap. It is up by 22% in the past 30 days, largely due to its integration with Kamino Finance.

June saw mixed signals in the markets, with inflation slowing but remaining above target, causing the Fed to hold interest rates steady. Despite this, stocks hit all-time highs, while ETH surprisingly declined amid anticipation of US spot ETFs. These ETFs are expected to launch soon and could dramatically impact ETH's price, making it a key focus for investors. Ethereum itself is gearing up for its next major upgrade, Pectra, aimed at improving flexibility and optimization. The upgrade, coupled with the growing L2 ecosystem and evolving investor behavior, signals a significant period of change for the Ethereum network.

June painted a complex picture for Bitcoin, marked by a tug-of-war between macroeconomic optimism and sector-specific challenges. While the US markets surged to new heights and the FED hinted at potential rate cuts, bitcoin saw its price dip and network activity cool down. However, this surface-level volatility masks deeper trends: rising institutional interest in CME futures and CEX markets, historically low implied volatility hinting at future price swings, and sustained network fundamentals despite the fading excitement around Ordinals.

The US Marshals Service will use Coinbase Prime to custody and trade crypto.

The $4 trillion-plus asset management titan is not opting to launch spot bitcoin or ether products — at least not yet.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.